Serving business owners since 1945

News

News and Notables

Lingate 2019 M&A Outlook: Continuing hot in spite of the political noise

Lingate 2019 M&A Outlook: Continuing hot in spite of the political noise

Look for 2019 M&A to pick up where 2018 left off
In spite of the ugly political noise, the regional M&A market continued to be very active in 2018, and was particularly hot for growing manufacturing and distribution companies with revenue under $25 million.  If you plug your ears, it’s easier to focus on the market drivers of 2018 that are still in place and moving the hot market forward – the tremendous amount of available investment capital, relatively low interest rates, growing economy and low unemployment.  Last year, we saw a big uptick in the number of businesses contemplating an internal transition or external sale, which should continue throughout 2019.  The M&A market remains “as good as it’s going to get.”

Transaction multiples topped out a couple years ago, but pricing has continued to hold at the top because of supply and demand for solid profitable businesses.  Under-performing companies, and companies with unpredictable revenue and earnings, continue to sell but require more extensive marketing, longer timelines, and are likely to achieve lower multiples than the consistently high performing companies of a similar size.  Public and private companies and private equity groups continue to have a lot of cash and will continue to be aggressive in their search for acquisitions. There has been, and will continue to be, a lot of growth in the number of private buyers such as family offices, high net worth individuals and partnership groups, and transitioning corporate executives.  If you are considering an internal or external transition of your company, we would enjoy visiting with you to learn about your company and your plans for the future.  Lingate is able to tailor a service plan, resources and fee structure to meet your needs and accomplish your goals.

Greg Loeschke